The current prior authorization process is an outdated, cumbersome process that may be causing your health plan teams to utilize inefficient practices that are not in complete alignment with your utilization management goals.

With plans receiving requests from various channels ranging from digital submissions to phone calls to using an excessive amount of time to review requests manually, your health plan’s utilization management programs are spending more time and costs to maintain a burdensome workflow.

Here are three major prior authorization challenges impacting health plans and what this means for your organization’s bottom line and provider and member relationships.

Health Plan Prior Authorization Challenges & Impact

1. Exhaustive Manual Process
Health plans struggle to manage prior authorization requests in a timely manner – much of which is attributed to the outdated submissions process and manual reviews. According to the Council for Affordable Quality Healthcare (CAQH), 74% of prior authorizations are submitted either partially (through a web portal) or fully manually (phone, fax, or email)¹. In addition, upon submission, each request may pass through a rules engine developed years ago or directly to manual review. Unfortunately, existing workflows cannot keep up, and providers must wait for these steps to be completed to deliver, sometimes life-saving, treatments.

For health plans, this means that not only are your administrative and clinical teams burdened with reviews, but providers and members are unsatisfied with a process that can take days to weeks to deliver a response.

2. Exorbitant Costs to Maintain
According to McKinsey, health plan utilization management programs spent a total of $7.2 billion² just on administrative tasks. For a payer, the costs of clinical reviews continue to grow – we estimate that the average clinical review costs $25, which can quickly add up.

Many of the costs for prior authorization requests are unnecessary, driven by inefficiencies and the manual labor it takes to handle the volume and execute the tasks associated with receiving, reviewing, and delivering responses related to the prior authorization submission. As a result, your health plans may be in a consistent state of spending to maintain this process and the spending will only increase as providers look to improve member outcomes and meet their own value-based care goals.

3. Poor Provider & Member Experience
Beyond outdated practices and high costs, the current prior authorization process negatively impacts the member and provider experience – 91% percent of physicians identified³ the impact of prior authorization on clinical outcomes as significant or somewhat negative. Meanwhile, nearly four in five physicians⁴ report that prior authorization causes members to abandon a recommended course of treatment, and 34% of providers say prior authorization has resulted in a severe adverse event³ for a member. While meant to help ensure members receive necessary treatment, the time-consuming prior authorization process can make it more difficult for providers to deliver much-needed care – driving member (Star Ratings) and provider satisfaction down.

An End in Sight
The current prior authorization process significantly impacts your health plan’s ability to effectively manage care quality, costs, and the provider and member experience.

However, this is all avoidable with the right approach – AI.

Read part two of this blog series to learn how to address these challenges.

 

---

Source
1. 2021 CAQH index. https://www.caqh.org/sites/default/files/explorations/index/2021-caqh-index.pdf. Accessed July 7, 2022.
2. Sahni NR, Mishra P, Carrus B, Cutler DM. Administrative simplification: How to save a quarter-trillion dollars in US healthcare. McKinsey & Company. https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/administrative-simplification-how-to-save-a-quarter-trillion-dollars-in-us-healthcare. Published November 4, 2021. Accessed July 7, 2022.
3. How the Prior Authorization Process Hurts Patient Outcomes. https://www.ama-assn.org/system/files/prior-authorization-survey.pdf. Accessed July 7, 2022.
4. Survey: Patient clinical outcomes shortchanged by prior authorization. www.ama-assn.org/press-center/press-releases/survey-patient-clinical-outcomes-shortchanged-prior-authorization. Accessed July 7, 2022.